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tv   Bloomberg Markets Americas  Bloomberg  December 1, 2016 12:00pm-3:31pm EST

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david: we are covering stories from san francisco to new york and london this hour. we will speak to the former nato secretary general about the future of the alliance under president-elect donald trump. fox shares advance 4% today. fox ceo joins us later. we will speak to the chef of a restaurant named fourth best in the world this year. julie hyman is here with the latest. julie: and what is another mixed day. we see another similar pattern with the dow higher, touching a record high on a closing basis of the nasdaq trading sharply lower with the s&p hovering in the middle. oil continues to be part of the story. we see prices rise for the second straight session, closer
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to $52 a barrel. by 4.5%, a two day gain is the biggest since january. that is powering higher energy companies. we are still seeing lags in other areas. interesting news from caterpillar, presenting at a credit squeeze -- credit suisse conference. talking about oil, saying that oil volatility made it hard to predict what customers will do and that the gains have not been sent -- substantial enough to affect spending decisions. the company saying that forecasts next year are too optimistic although caterpillar did say it is somewhat optimistic when it comes to infrastructure spending and other presumed measures of the new administrator -- administration.
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caterpillar is still struggling on a number of different fronts around the globe. if you look at the dealer ,eported retail machine sales this is the year-over-year change and the red line is the zero line. we see declines in europe, africa, the mid and north america. of the somewhat right spot is asia-pacific although a lot of the gains are coming from china alone. we are also watching tech today. a steep tumble, down by 4%. it was reported that apple is decreasing the iphone 7 orders demandorders for moderate. that is having a ripple effect among suppliers. as for apple, the shares are lower today although not lower by that much if you look at a five-day chart and the recent trajectory we have seen, we have seen weakness by about 1% in the past week. vonnie: thank you for that mixed
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news. let's check in on the bloomberg first world news -- first word news. the first candidate driven statewide recount of a presidential election is underway in wisconsin. president-elect donald trump won the state by less than one percentage point over hillary clinton. jill stein asked for a recount in wisconsin, michigan, and pennsylvania, although nobody suggest -- suspects the results to be a clinton victory over trump. let a mere couldn't says he will -- vladimir putin made his annual state of the address. he said attempts to distract the balance are dangerous and he warned that russia will not allow interests to be infringed upon. former cia director david petraeus would face unique challenges if selected as
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secretary of state. last year come up a tray is -- ust year general betray pleaded guilty and is on probation for two years. he would be subject to warrantless searches to his probation officer. thailand has a new king. the crowned prince formerly took the throne to succeed his father. the new monarch is the 10th king in the dynasty founded in 1782. global news 24 hours a day, powered by more 2600 journalists and analysts in over 120 countries. i am emma chandra. this is blumberg. david: thank you so much. looking at pictures of laguardia airport. the first stop of the victory lap thank you tour is expected to deliver remarks later today
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at the carrier air-conditioning factory which was made known that the factory and carrier conditioning announcing hundreds of jobs will be brought back to the u.s. let's stick with politics and the debate over the future of nato. here is what then candidate donald trump said back in july. mr. trump: you saw the headlines trump doesn'to, like nato. that is false. i want nato and the 28 countries, 28 and we are picking up 73%. we are protecting them. it has to change. i like nato. when i get in, they are going to pay. david: donald trump campaigning back in july. joining us now, is anders fogh rasmussen, the former prime minister of denmark and the author of a new book "the will
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to lead america's indispensable role in the global fight for freedom." the point that president-elect trump made was all countries in nato are supposed to pay at least 2% and only five of them do. why is this such a difficult issue? weers: i think we will know are in the right direction. two years ago all nato allies subscribed to the pledge that within the next decade vote -- they will reach 2% of defense investments and this year european allies pay much more than they did last year. the trend has been reversed. trend fort is the nato as you see europe potentially break off and at least a lot of reaction against the current state of affairs? the same thing in the u.s.
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does nato thrive in an environment like that? anders: i think president trump and the allies could easily turn this into a strengthening of our alliance. i would recommend that soon after he is in organization they organize a nato summit. we will all reach the 2% we will help ukraine as a friend. vonnie: we should mention you are an advisor to the president of ukraine. anders: absolutely, i am biased. i have always supported the ukraine and certainly, they should also state our commitment to collect the fence is unchanged. if someone would attack one ally, we consider an attack on would send ad that very clear signal to putin and
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who else it may concern that it is a strong alliance. david: are you satisfied that the president-elect has a good enough understanding of what that charter is and what it means? anders: i think he will get that understanding. already, here, you show that he moderated his very first statement which was damaging for nato because he raised doubts about the american commitment to collective defense. that would weaken nato and our -- mr. putin to test the resolve of our alliance and it is important mr. trump understands such statements cannot be repeated as president. i also think we will see a trumpent president in than the candidate. vonnie: we keep hearing that and yet the appointments so far do not suggest that. they seem to suggest what we saw on the campaign trail. we know a little bit about his cabinet when it comes to
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defense. we have general flynn and some advisors. what does that suggest about how the u.s. will interact with the rest of the world? anders: we do not know the whole security team now, but i think the appointments he has made and the names that have been floated indicate that he will be willing to listen. so far, i am quite optimistic and quite satisfied. vonnie: you look at -- david: you look at what happened in paris and the threat of terrorism on the continent and i wonder if nato needs to play a more outsized role combating terrorism in europe. how does nato need to change or adjust? how does the european community to change or adjust to deal with the terrorist threat? anders: i agree that nato should
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play a stronger role in the fight against terrorism. that is why we diploid troops to afghanistan -- deployed troops to afghanistan. i think we could increase nato patrolling in the mediterranean to monitor the influx of refugees and immigrants. i also think nato could play a stronger role in syria and iraq, including through a much localer training of security forces. that would be an excellent opportunity. david: is the appetite in europe for more engagement in the syrian battlefield? anders: i think there is a growing understanding that european countries need to engage much more because europe is almost sinking under the burden of refugees and immigrants.
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you cannot expect other to have those problems, you have to engage yourself. i think that is why time has come for europeans to accept a stronger role in the middle east. the formerie: as prime minister of denmark you have a particular view and having been secretary general of nato as well. do you understand why europe and the world and developed nations are moving toward more negative policies -- domestic more of a turning inward? do you think that will continue? anders: let me start by saying i hope it will not continue because that would make all of materially andth mentally. i think if we close our society -- and the last 70 years we have ,rofited from an open society
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we have profited from a world -- rules-based world order. i hope that will continue, but it order to an sure it will continue, i think we should also take seriously people's concerns regarding immigrants and refugees. 1 david: david: what is to be done about turkey? responding to growing talks that turkey not be included in the european union and would open the doors to refugees going to the rest of the continent. what is the path for europe with regard to turkey? anders: i think we are all concerned about the development in and around turkey. on the one hand, turkey is a very important ally. strategically, turkey is the bridge between europe and the middle east and asia. it is of vital importance that we keep turkey on a western oriented and reformed course.
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on the other hand, we have to engage in a very critical dialogue with the current government and tell them that we cannot, we will not compromise on democratic principles the rule of law, due process, etc.. so we have to tell them that .u.le we still continue e negotiations and keep turkey within nato. david: thank you very much. former secretary-general of nato, anders fogh rasmussen. vonnie: let's go to mexico city where erik schatzker joins us live from mexico. he is there with american mobile chairman. is a rare treat to have a chance to speak to you. thank you for taking time for us.
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>> welcome to mexico. erik: delighted to be back. the conventional wisdom come as you know, is that the donald trump presidency will be bad, if not terrible for mexico. what do you say? >> i do not think so. first, what will be the reality of what he has said is different. like a candidate and like a resident. he is tough -- liquor president. that talking about issues are important for mexico, that -- 5ll create the jobs million jobs, that is too many and they will try to work from percent and that the deficit will be -- i think all these issues are if it happens, it will
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be good for mexico. he is also talking about getting down the taxes for the middle class, that will be good for mexico. erik: for middle-class americans. >> for middle-class americans. on consumption in the u.s. and that is good for mexico. if he is going to create these jobs and to do this kind of ,ommitment, at least in part they need many, many mexicans to these jobs and the most qualified people are these jobst qualified mexicans. hispanics, not from central america and other countries. erik: he needs mexicans where?
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here or there? >> here and there. you will need mexicans there and ask here and it is important for the consumer in the u.s. to have good practice. the moneys that are in the markets that have gone into fiscal deficits are huge. they are very big investments and recently they are not creating inflation because many of these go to the financial economy and not the real economy . put a tax of 35% on imports because you save a few thousand jobs, he will create a problem for 300 million americans. erik: what about trade? he has taken an aggressive position on trade with mexico and says he wants to renegotiate
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nafta and get a better deal for the american people. think that the administration can be best for both. u.s. should the protect some of the jobs, especially the jobs that are strategic and the goods that have aggregate value. i do not understand how candy -- productshey produce with high wages -- wages of $30 an hour. that is what they pay, against $15 a day, that is a big difference and i think this will not be competitive and if they tried to do that, the cost for
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the american people will be too high and the consumers will pay too much for everything and i do not think that 300 million people will be happy paying so much and having a big inflation because one of the things that is the priority for the president of the united states like other presidents is the interest of the people. the interest of the people is to have jobs and have good prices of the things they are buying. erik: how would you improve nafta? mr. slim: i think we have many things to do because many of the things we export to you our important.re we make only the aggregate value of many of these products.
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you have a big deficit worldwide and i think that is an opportunity for mexico. especially now with the policy rate and -- erik: mexican exports are very competitive now. countrieswhen you buy and other places, you buy goods and assets. with mexico, you will buy goods, but you will own the factories and at the end of the day, the important thing is not only the trade, but the capital movement because trade can have deficits, willhe capital movement get back to the u.s. to take out the deficits. erik: your attitude toward the trump presidency is perhaps a little more positive or
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optimistic than some people might have thought. i would be more worried if i were an american. erik: really? why'd you say that? mr. slim: if you are going to close the economy, it is bad. risk to lose the international leadership of the united states. you are a leadership as much as you have a leadership in technology and it is many of these issues that stop with technology development. you are the leaders in technology, but there are other countries moving their, china, israel, and everyone wants to improve, but i think that is a main issue. another way that we can help in this agreement of the new nafta
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is help -- health, you pay too much for health care. in mexico it would be 80% lower. the cost of health here is lower than in the u.s. that is a big opportunity that you can extend medicare here and everyone will pay -- erik: americans would come to get medical services in mexico? : yes, and they can have it everywhere. erik: does the election change any plans you have or had for investment or expansion in your businesses? mr. slim: no. we are mainly in latin america. we have a big operation in the u.s. and something in europe. we always take care of our
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investments because we cannot get behind in technology, offer ourand to customers every service and we cannot stop this because of any reason. it gets cheaper because now we pay less for what we are going to do in dollar terms. in dollar terms it will be lower. have the concerns that you about the effect of trump policies on the domestic economy and america's standing in the world, does that change the calculus that you may have for some assets in the united states? you own a very large prepaid wireless company. esther slim: i think -- mr. slim: i think there is not any change in that. he is talking about climate not tellinge is
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that he will get out of climate. that is important. at one time he says he will get out of everywhere, he wants to make a schlanger army -- stronger army come a strong military country, and maybe he is looking to negotiate the resources that will pay for that. i think it is an issue of negotiations. negotiation to make a u.s. paid list for many of these things. that is good for washington. out foruting corruption. i would like to think that is good for everybody. mr. slim: i know. erik: i mentioned this business you have, tracfone, what is the
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long-term strategy? is it to continue as it is or maybe merge it with a wireless carrier or sell it? mr. slim: in the short-term it is to follow what we are doing. we have to follow what is happening in the industry, it is moving very fast and we are alert to what is moving and what is coming and depending on all these things, we will see if it is the right moment. erik: what is more likely to happen in the longer-term? mr. slim: it is harder to define at this moment, but we are working in the short-term to what we have done to make it profitable. operation and a good market share. erik: your former partner, at&t greatest threat to your wireless business. is at&t playing fair? mr. slim: we knew that they were
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going to come to compete because we opened the door. pieceow they have a big of american movil. in the beginning, 1991 they had and we opened the door to them buying back. they are getting very aggressive, maybe a little more than what is intended, they are losing a lot of money. i do not know how much, but they are losing a lot of money. you can see that in the balance sheet. the surprise for me is that they are selling at a very low price
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here, 50% of the price in the u.s. -- less than 50% of the price in the u.s. erik: is that anti-competitive behavior? mr. slim: i do not know. erik: i think you know more than i do. do toan american movil stop at&t from taking your market share if they continue to price at that level? mr. slim: they are not taking too much market -- they are subsidizing too much the assets and they are taking some market from competitors. as long as it is good for the consumers, we are happy. erik: even if it hurts your margin? mr. slim: because that is
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short-term. you cannot be with these prices always because all the americans will buy services here instead of the u.s. erik: you know that randi stephenson, at&t's ceo considers you a mentor? mr. sling: i perceive him very well. i knew him since he was in mexico. mr. slim: i knew him since he was in mexico. sbc which became at&t. mr. slim: at the end of the day, 1994 the decision to break at&t was very bad. instead of doing three national fewetitors they made a
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companies. they came back and now they are verizon and they lose too much time. erik: given the relationship you had with randall stephenson and the fact that he is now competing against you so aggressively, how does that feel? usualim: i think it is for the markets. they want to win markets very fast and they have an interest in mexico that is good. they have a good interest in mexico and competition always makes you better. erik: it does not feel like the trail -- it does not feel like betrayal? looking -- hei am is looking at the interest and at&t. -- in at&t. erik: where are you most interested in investing your
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money today? what is most attractive? very interested in the development of our country and other countries and int is what we are working the organization to help strongly. we are working strongly in the areas where jobs are creating. you cannot solve with philanthropy. the only way is with jobs, you need to create jobs. the best social program is to create jobs. in this areactive
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of construction, real estate development, housing, etc. these are job creators and we are very active in that erik: i would like to ask you about fidel castro. you had an unusual relationship. times.m: i met him a few the last time was many years ago , 2001. erik: what have you been thinking these past few days since his death? mr. slim: i think that you lose the opportunity to change cuba. in 1991, i was optimistic it was going to happen because if you remember, in 1991 they needed to work through the special period because the soviet union took out the support they used to give. i went there to invest in the telephone company and it looked very clear that things could change easily.
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erik: and it didn't happen. mr. slim: and it didn't happen. erik: what will happen now? mr. slim: i think one of the problems was things were not working together between the u.s. and cuba. -- it changed everything because it was moving in the right direction. erik: now that he is dead, do things change again? do you see changing wireless phones in cuba? mr. slim: the one that will get to cuba, we were looking in that and it was a mexican group. erik: what i would like to know is do you now see an opportunity to expand into cuba? mr. slim: when it is open, it was -- we are interested.
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the only companies that are not in cuba are bolivia and venezuela in some countries of the caribbean. we are everywhere in latin america. erik: will you -- would you attend fidel castro's funeral? mr. slim: no, i was there the last time in 2001. i visited two or three years ago like a tourist. erik: to conclude, as you know, now and then people mention your name as a potential candidate for the presidency of mexico. mr. slim: never. erik: if donald trump can be president of the united states why can't carlos slim be president of mexico? mr. slim: i am not donald trump. i think my profession -- i do not have a political location. in politics, things have been very lonely.
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erik: if it is not going to be you, there is an election in 2018. what do you want to be a from the people who run the office? what is most important? mr. slim: i think it is important that we have a very low amount of corruption. that is a point we need to and it is interesting trump talking about that in washington. it is something everywhere in needs to be eradicated everywhere. that is a main issue and the other is to have a good program to make mexico grow. mexico has lost many opportunities to grow.
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what should be open is the private investment. i like that trump talks about fortifying ships. erik: for infrastructure? mr. slim: infrastructure. also, a national commission. the only job is to make infrastructure get developed and to sell the rights and the concessions to have the might to make everything. that, now we move fast for
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the investments. we need economic activity everywhere. we need to make investments and have economic activity. economic activity will make great jobs. erik: mr. slim, thank you for being so generous with your time. thane, that is none other carlos slim -- vonnie: that is erik schatzker there with the american movil chairman. david: we have an interview coming up with apparently be. -- aaron levie. ceo aaron levie is with me. profit is beating estimates. what was different about this year? think one thing we have been benefiting from his building a platform for 11 years that is differentiated from the rest of the competitive
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landscape. more and more enterprises need to be able to move data to the cloud. we have the most competitive product in the market for helping large companies and companies of all sizes be able to store, share, and collaborate their information in a secure way. that has been going well and we are benefiting from the fact that most enterprises around the world need to modernize their infrastructure and the way they work and we happen to be in the right place in the right time. emily: do you see growth from expanding sales to existing companies or adding new customers? aaron: it will be a mix of both. anyproduct makes sense for size business anywhere around the world. we see a dramatic expansion happening because of new customers on board. we now have 69,000 businesses that use the product and we see continued expansion within existing accounts. some new products we launched throughout the year and a half haveare add-on products
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been performing very well. we think we will expand in terms of new product sales to existing customers, as well as reach new markets and new segments of the customer landscape. emily: you already have partnerships with big tech companies, ibm and microsoft and i you have a partnership with google and facebook. do you have concerns that they will add box type functionality? what is unique about the cloud is as enterprises move to the cloud, they will use more applications than ever before. some companies have 30-50-'s -- 30, 50, 100 staffers that power different enterprises. you are going to want your content and data to be stored securely in one place and connect to all the applications.
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our fundamental strategy is to be the agnostic horizontal platform that connects those services. emily: you, like many in silicon valley, were vocal about the presidential election. you had a conference -- you had a tagline "make software great again." aaron: that was when it was a joke. emily: you created the first task, trump can create -- keep america great is if he can help the country move forward. what are your concerns? aaron: there are two big components of trump specifically moving into office. the first is i think the campaign that we saw over the past year, the rhetoric from the campaign created a lot of divisiveness. he needs a very strong message that is one of the social issues and the inclusion we need is a country to be able to build great organizations and be able to innovate.
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that would be the most important thing i would want to see. the second part is, we have a bunch of issues in the tech industry that relate to policy and government regulation, but these are increasingly not becoming tech issues only, but issues for the rest of the economy. emily: talking about immigration, trade? aaron: and even things that are tech specific today, but will impact eventually every company. car companies moving to autonomous vehicles, manufacturing vehicles moving to automated manufacturing. the issues in silica and value -- silicon valley will be applicable to every company on the planet. while we think about these issues as silicon valley issues, they will be issues for every large enterprise and type of company that exist. we need the administration to be whatdibly thoughtful about
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types of regulatory issues, policies are going to create the innovation economy going forward and that will be incredibly important. company like a facebook take greater responsibility for their role in shaping sentiment? facebook has an interesting role to play in this election a side, a role in how media is activated. inherently in their product they have algorithms that will highlight information they think you want to see. they said they are highlighting arermation that they assuming you want to see that may not be accurate information, then i think they may have a role to play to make sure there preventingunt of this information from spreading. that would be a personal opinion. as a public company, they have a bunch of decisions they need to make in this area.
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have one thing in common with donald trump in that you both like twitter. should he lay off it? aaron: he should lay off certain parts of it. i do not think twitter is the problem come i think it is the messages that can be problematic. at best, very distracting and create a lot of noise when right now i think america wants to hear policies of the new administration and who are the people who are going to be in key positions. what are the frameworks we used to govern the country? i think there has been distracting rhetoric even postelection and my personal weice unsolicited would be could decline on that and get to more of a sane and stable period where we hear positive messages about the future of the country and that would be what i would hope to see over the coming months and throughout the administration. emily: box ceo, aaron levie. vonnie: thank you. david: more reaction to big news
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out of mexico today as the chief of the nation's central-bank announces he is stepping down. we will speak with the chairman of -- in mexico city. ♪
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♪ vonnie: let's get back to mexico and the announcement that the central bank -- the head of the central bank is stepping down. with ruiz lovas uiz, the president of the
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mexican bankers association. a friend of yours is stepping down from the central bank. what is it mean for the country? >> first, i would like to say that he is one of the better central bankers of the world. it is not my opinion, it is the opinion of a lot of people that .hey have discussed mexicans.y proud of erik: proud, but i have to imagine sorry at the same time. bank of mexico is a very sound institution. 25 years ago, they have
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respected the government. governors until now . they handled the bank perfectly well and the banking institution. they are like the fed. he was a very respected central banker. independence is one thing, institution audi is another. monetary policy is a different animal altogether. successors,now his governor of the central bank, is going to create the same kind of conditions that have helped your industry. military -- monetary policy decides what happens to the banking industry. vergilio: that is -->> that is correct.
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the one mandate is to maintain deflation. that is it. the mandate is very complex. you seekake it that consistency? >> absolutely. erik: let's talk about summing that is not -- that may not be -- let's talk about something that may not be consistent, the trump presidency. i am a believer in the north american rich. erik: so he will not tear up nafta?
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says let's make america great again, i say, that is good for mexico. that will make mexico great again. erik: making america great again, to use his terminology, makes mexico better? >> of course because the integration of both countries is deep. in commercial terms, in social. erik: if this was true, why was there so much concern about donald trump's visit to the president -- before the election? it cost the finance minister his job. >> you have to understand that during the campaign mr. trump concepts ofme rough mexicans. here in mexico, it was taken as
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an insult. i was trying to avoid that word, but really. erik: so now what happens? you are the chairman of the bank and a bank has corporate clients and consumer clients? what are you telling those clients to do in the new from work -- trump world? all of the aspects of the relation are the winners if you compare it with asia, europe, all other parts of the world. i think it is a win-win situation. incourse, there will be -- the negotiation that will be worked out during the next months.
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herenk finally nafta is for a long time. my basic idea is that it will be good for mexico. roblez, you heard it from him and from carlos slim, good bit of futurem about mexico's under the trump administration than i expected to find. vonnie: our thanks to erik schatzker in mexico city. gastrogastric tourism -- .tourism takes off we talked to the best in the world.
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this is bloomberg. ♪
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♪ david: this is bloomberg markets -- this is "bloomberg markets." i am david gura. peru's cuisine is capturing the world. we talked to one of the chefs the hind this, the chef and co-owner of a restaurant in lima, named the fourth best restaurant in the world. he joins us from london. i wonder what it means when you get an accolade like that, how does doing business change? ergilio: we have more and more exposure. we are so focused on international and the very global audience and guests who are demanding on eating the whole peru. david: i am curious about the
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role of ingredients. i was in bogota and the focus was on colombian ingredients. the chef working hard to learn more about them and bring them back into modernist cuisine. this is important to you as well. virgilio: it is not just a trend, which some people think it is just a trend to be local and use local ingredients. of working with your farmers and producers and working with your country and your region. david: you have two restaurants in london and there is a huge appetite for your food in peru. what would you say about the demand for peruvian cuisine in london than more locally? virgilio: it is a challenge to have a peruvian restaurant in london because there are not much peruvian ingredients and
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not many peruvians so we have to adapt to the different market with different people. in ave to introduce it different way. it is a matter of patience and working hard on getting real ingredients and all of a sudden -- and using ingredients from london and all over the world to make peruvian cuisine. david: are you seeing friends and colleagues from peru looking to move to europe and the united states to do the same thing? virgilio: of course. getting global. i think it is going to go much of, lettingrms
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people know about what is happening in peru. people know about lima, the capital, but people do not a much about what is happening in the andes or the jungle or the amazon. i think that is the next thing to come for the world to show. david: thank you so much and congratulations once again. for more, check out pursuits, your destination for the finer things in life. nipurad to -- head to suitsgo. this is bloomberg. ♪
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david: it is 1:00 p.m. in new york, 6:00 p.m. in london, and 2:00 a.m. in hong kong. good afternoon. i am david gura. vonnie: and i am vonnie quinn. welcome to bloomberg markets.
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from bloomberg world headquarters in new york, we are covering stories from san francisco to new york and bangkok. the bull market in bonds looks to be ended with a bang. we will investigate. president-elect donald trump is starting his victory lap in indiana today. he is not just celebrating his win in last month's election, but his success at keeping manufacturing jobs in the united states. food inflation is on its longest streak since 1960. a look at how it is impacting sales for the nation's largest supermarket chain. halfway through the trading day -- there has been a lot happening including the aftermath of the opec deal and much more. julie hyman will tell us. julie: we are seeing losses in the nasdaq accelerant. the divergence between the dow
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and the nasdaq is growing. .3 3%, andnow off by the nasdaq is off 1.5%. a different story depending on which group you are looking at today. we will look more at what is moving within the major averages in a moment. first, let's get to oil. here is the one-weekwe will lood the incredible gaining the wake of the opec meeting has sent oil higher by 12%. all of the game coming in the last two sessions alone. barrel.at $51.56 a it is interesting -- one of the correlations we have watched consistently has broken down in recent days. that is between oil and the dollar. that, we can look at the bloomberg. the top chart shows crude prices in white. the dollar in blue. classically, there is this inverse relationship. when one goes down, the other goes up, and vice versa, but
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that is no longer happening. they are both going higher. oil driven by opec headlines. the dollar is driven by other factors, including optimism over the u.s. economy and the thought the fed will be coming out here and raising rates. getting back to u.s. stocks and what is moving -- you have banks rising as yields are higher. automakers are up on better than estimated -- for many of them -- sales in the month of november. on the flipside, semi conductors -- a steep decline for that group. there was a report in asia that iphone 7 moderating orders. food and beverage companies -- you just heard vonnie mention what is happening with food inflation, and it is set to pick up even further. as for yields, we are watching not only what is happening in the united states, but also around the globe. yields in europe especially are higher. theers is reporting
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european central bank is awaiting a formal signal of the end of asset-buying after its meeting next week. we see german, italian, and spanish 10-year yields climbing. we have the italian referendum this weekend. something else to consider. david: thank you, julie hyman. let's check the first word news. emma: robert gates visited trump towers today, locking them with michael flynn, the pic for national security advisor. the visit was not clear. gates was a critic of trump during the campaign. in a wall street op-ed, he called trump unqualified and unfit to be commander-in-chief, but in his interview yesterday with cbs, he said "i am hoping i was wrong." withg -- russia is meeting
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non-opec producers. in an exclusive interview with bloomberg ocean, barkindo discussed the cut in production. >> a lot of discussions at the technical level, a constructive welogue that went into -- can say it was largely responsible for this historic moment. focus will shift to houston to the group will implement the agreement. government-sponsored hackers have launched a series of cyber attacks on saudi arabia in the last two weeks according to people familiar with the investigation. the attacks rate havoc on computers at the saudi agency in charge of the country's airports and five other targets. digital evidence suggests the attacks came from iran. change is i had for major league
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baseball. then we -- team that wins the all-star game will not automatically get home field advantage in the world series. included in the new included in the new collective bargaining agreement. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i am emma chandra. this is bloomberg. vonnie: the u.s. bond market has renewed selloff and a stronger economic case both -- bolsters a rate hike. have we had a turning point? let's get perspective from ian u.s. ratee head of strategy at bmo capital markets. i think it is the first time since your employment. congratulations. ian: thank you. vonnie: are we prematurely
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calling the death of the bond bull market? ian: i think we are. i think between now and two or three quarters we will say the information we heard from the government, the amount of fiscal stimulus we are able to get will not come in the exact forms and the level of optimism the market is currently pricing in. this backup in treasury yields certainly does increase the opportunity we see a fair amount of did buying overseas and sideline investors that had not been participating until now. david: help us with the strategy of dealing with that uncertainty now -- a lot of talk about infrastructure, tax cuts, what might happen with the federal reserve. how do you approach a? -- that? ian: we are trading off of several things. one is the movement in asset classes. --oil, the rally in equities we are trading the market technically. we have supply on the way. the general consensus is the fed
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will go into weeks, and when the fed goes, people will bring forward expectations for future hikes, and when that happens, it will be a good opportunity to get in and buy treasuries. vonnie: i was reading a note from peter boulevard from the lindsay group, our story, in fact, talking about -- being lost, but it has not really, because for every seller there is a buyer. it is just the pace of selling. it looks to the naked eye all the money is leaving bonds and going elsewhere. is it? ian: to some extent it is. to some extent, people are repricing the market, and it will be someone on the other side of the trade, making money from the short position. that part of it makes sense. let us not forget a few of the major holders of treasuries -- japan, areina, typically not as
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price-sensitive. these movements will not be causing them as much angst as they might be more active investors. and china, and the uncertainty surrounding both of them going forward -- china depending on what happens with training policy -- trading policy, and the fed, with wholesale reform of the institution. you are trading with optimism, but uncertainty seems so overwhelming. ian: it does, and there are some real changes that could happen. at the end of the day, they could be a lot slower than the market would like to see, and if they are slower, they are less inflationary. if they are less inflationary, i think 10-year yields at 2.60 become an attractive buying opportunity. vonnie: talk about inflation expectations. they have risen -- nowhere near even where the 10-year is. i was looking at the five-year, five-year forward once again. it is 1.92%, or so, according to my bloomberg.
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that is 30 or 40 basis points from where the 10-year is now. where is the true inflation expectation? ian: well, certainly there has been a lot of inflation optimism as well built in. look at what is going on in oil. if you look at what is going on with what fiscal stimulus could really mean to demand, what it could really mean to fluctuations with currency, and what we could be importing in terms of inflation, or exporting, depending on how the trade workplace out. david: you look at what is priced in for the meeting two weeks from now, the liquid of a hike, i imagine you will be listening for forward guidance. small increments, do you think? how many rate x are you looking for in 2017? ratewe are assuming two hikes in 2017. forward guidance will get us there.
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they will want to lay the groundwork to follow through with the hikes if the data lots them. we think optimism in the beginning of the year, with a little bit more of a reality check for the second and third quarter. the treasury market will trade that way, and so will fed funds futures and expectations. a surveyan, you do an aery month, can you give us heads up on your results? ian: yeah. vonnie: really -- breaking news. ian: we were asking at what level would you come in and treasury.y 10-year the number was 2.59. if we get a selloff at that say --that high, i would expect to see some. vonnie: that is interesting. the bank of england was saying 2.40, inflation fears
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would be on the way with what the president-elect decides to put in motion. david: are you looking at the attitude toward the labor market -- totally happen -- happy, or what of the deficits they may see? is worriedk the fed about underemployment -- there is a mismatch between the skills people have and the jobs out there. some of the initiatives coming out of washington will attempt to address that. it is not clear to me they ultimately will. vonnie: we'll have to leave it there. great to speak with you, ian lyngen, head of u.s. rates strategies at bmo capital markets. thiel firm --er have a plan to find an mark zuckerberg. that is next. this is bloomberg. ♪
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this is bloomberg markets. i am david gura. vonnie: i am vonnie quinn. time for a look at the bloomberg business flash, the biggest business stories in the news. carnival cruise lines will plead guilty over waste dump from one of his ships -- the largest u.s. fine over vessel solutions. investigators found in more than 4000 gallons was illegally dumped off the coast of england in 2013. delta airlines pilots have signed off on a contract that includes a 30% raise over quattro years. it might boost delta's labor spending by half of $1 billion in the first year according to jamie baker. it might lead to higher highlight wages and other airlines as a union seeks to
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match against. a metro central bank governors is leaving his post to run the bank for international settlements. the departure leaves the nation without its most experienced and internationally renowned policymaker as mexico faces new economic challenges from the administration of u.s. president elect donald trump. that is your latest bluebird business flash. peter thiel is known to be unconventional in searching for the next big thing. his thiel fellowship awards grants to two dozen college-age students on the condition they drop out of school's to start compass. two have started their own funds. lose at chapman joins us from the san francisco bureau with more. who is behind us, and how does the fund work? >> hi. well, peter thiel is one of the major backers along with 29 or
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so, you know, figures, in technology, including the skype, likeebay, the coors family and the hunt family. it is set up like a venture firm. they all chip in a certain amount and the fund itself is $20 million. from there, the general partners, michael dixon and daniel go for -- go and search for promising young technologists. some of these are former thiel fellows that no longer qualify for the fellowship because they are no longer in college or did not want to drop out. some of them are friends of theirs, or friends of friends, and the like. ad and receive investments that could be up to $250,000. and in some cases they get just gifts.
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so, they never have to be paid back. it is really a scouting program. call it a billionaire benefactor network on steroids, if you will. college,r the price of which they will not be going to if they are peter thiel acolytes, right? now, is the market saturated with the program because it feels like it is nothing in a market that has $72 billion invested in the united states. lizette: that is a really good point. it is a small sum, but it could be -- one of the reasons peter thiel and some others have invested is because of the timing of this. you know, this fund is targeting young technologists just starting adulthood. these are people in college or just recently graduated that are working on ideas, like, you know, biometric sensors for hospital gowns, or contact
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lenses with sensors in them that diabetics can wear to monitor glucose levels -- those types of things that may strike it big or may not. to your point, this is just a drop in the bucket. it is, but they are hoping that by making these early investments, and in some cases, just straight up gifts, very early, and at critical times in these technologists' careers, they will generate good favor and hopefully be there when they have the next idea. remember, it was just a $5,000 check peter thiel wrote to mark zuckerberg that catapulted him into the ranks of billionaire. david: you talked about the moment, and i remember talking to our colleague about how difficult it is to get funding these days, because so much startup -- venture money is going to companies like uber -- rather big companies. can the grant make much of a difference here, and what we
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have not talked about yet -- i am cares about the balance -- what do they get it -- in exchange? are they getting equity in the company? lizette: if it is a standard investment of $250,000 or so, it is done in the form of a convertible note, which means 1 -- if for when the startup goes on, it creates something investors are registered in, that converts to equity shares. they get shares in the company. if they do not go that route, and they give them a gift of, say, $1000, so the young technologists in michigan or boston can come to silicon valley, join an accelerator, maybe, you know -- 80 it is a $10,000 gets credit for -- maybe it is a $10,000 gift credit for amazon web services.
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maybe they can ditch a server and scale their operations. if they can do that, it is simply a gift. they say there are no strings attached. they have given out about 60 of those gifts so far, and some people check in with them every month. threeeople disappear for or quattro months, don't say anything, and come back for mentorship, advice, and networking with other thiel follow alums and -- fellow alums and investors. david: july. great piece. lizette: and mike -- lizette chapman and mike goodson will be joining bloomberg later today. president elect donald trump is starting his so victory lap in indiana today. we would look at his self-proclaimed success of keeping manufacturing jobs in the united states. this is bloomberg. ♪
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david: this is bloomberg markets. i am david gura. vonnie: and i am vonnie quinn. in the next hour, president-elect donald trump is expected to announce a deal with air-conditioning company carrier that would keep 1000 jobs from moving to mexico. while keeping manufacturing jobs in the u.s. has been a theme, our next guest says the deal is too little, too late to make much of a difference in the declining manufacturing industry. it could herald a new era in presidential job owning that is not been seen since the likes of lyndon b. johnson. mark maquette is a bloomberg business news reporter. he joins us from the phone. i have seen different numbers of how many jobs will be "saved" -- we will see right now around 1000 -- what difference will it make, and what will carrier get
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in return? a difference to the folks that would lose their jobs, especially around the holidays, but the deal does not prevent all the jobs from leaving. aboutr will still send 1300 jobs to mexico, and it is part of a deal that includes $7 million in state incentives -- grants for training, tax incentives for investing in the company that the state and carrier have agreed to. a nickel forad every time carrier brought up the air conditioning company on the campaign trail, i would be a rich man. he talked about it a lot. can we extrapolated further -- these jobs being saved. is there a precedent for other country -- companies? mark: that is the key question to donald trump made this a big part of his campaign. it was exhibit a of what was wrong with trade deals in his mind, these jobs moving to mexico. he gave a 100% guarantee he
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would stop the carrier transaction from going forward if he were elected. he is delivering on the promise, but it is not clear whether this is any kind of sustainable economic policy. if you talk to the unions or economists that welcomed the deal -- they are glad to see the job stay here -- it is not going to necessarily do anything to affect other plants that might have the same kind of economic forces working against them. we are in an age where the of automation and increasing globalization we are seeing huge increases in productivity in manufacturing output, and at the same time employment is going down, and wages are going down. this one deal is not going to stem that applied. even at this carrier plant -- one reason carrier was going to move the jobs to mexico is they have to pay $30 an hour for labor costs in indianapolis, and can do the same work for about three dollars an hour in mexico. vonnie: and bloomberg is reporting the agreement gives tax incentives of about $700,000
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tax incentives of about $700,000 from the state of indiana. it is not like this is a free lunch. in some ways it might be better to reach kind of people that might lose their job anyway, when these tax incentives finally do disappear. mark: right, and some are critical of the tax incentives, saying you are giving away tax money, and it will not change the long-term dynamics or affect what is happening with manufacturing in general. trump, in fact, had promised to use tariffs as a stick to get these jobs to stay in the united states, and here he is using a carrot instead. vonnie: mark niquette, bloomberg news, from columbus. thank you. this is bloomberg. ♪
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vonnie: live from bloomberg world headquarters in new york, i am vonnie quinn. -- davidd i am david gura. let's start with headlines. emma chandra has more from the
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newsroom. chris christie is reportedly interested in heading the republican national committee. says it was told -- told he is interested in the post. the first candidate-driven statewide recount of a presidential election in 16 years is underway in wisconsin. the state bywon less than a percentage point over hillary clinton. green party candidate jill stein asked for a recount in wisconsin, michigan, and pennsylvania, but nobody expects the results to be a clinton victory over trump. vladimir putin says russia is willing to work with the incoming u.s. president on equal footing. he made his annual address. some of it sounded like a warning for u.s. president-elect donald trump.
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he warned that russia will not allow its interests to be infringed upon. and thailand has a new king --the country's crown prince has formally taken the throne to succeed as much revered late father who reigned for seven years. he is the 10th king in the dynasty that was fine did -- founded in 1782. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am emma chandra. this is bloomberg. david? david: thank you. the dramatic punch and grocery prices might be a boom for consumers, but it is turning into a headache for companies like kroger. let's look closer at the company in today's "the numbers don't lie." start with kroger stock -- it is higher today, but longer-term, kroger -- the blue here, has strayed -- trailed the broader market.
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what is driving stock performance? slowing sales growth. food deflation is pressuring the grocery industry to offer heavy discounts that way on margins and scales. kroger has managed 52 straight quarters of positive sales growth, as you see here, just eking out a positive quarter this time around. looking closer at food deflation -- we are currently in the longest streak of falling food prices in more than 50 years. it has dropped year over year for 11 straight months, and it prompted kroger to say on its conference call "the food inflation cycle is not fun." it hits kroger harder than others because the company is the second largest seller of groceries after walmart. kroger could get bigger. dealsave said m and a could be part of the recipe to accelerate sales. we will be following the stock for the rest of the trading session. vonnie: boyle is something we
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are tracking in today's session as well. fresh off the news of the opec and the vtirent rising, hitting levels we have not seen since july 2015. anne-marie horton sat down with mohammed barkindo for an interview. here's what he had to say about the agreement. : iraq was notndo part of the arrangement within opec for quite some time, if you recall, though nominally they accepted in december of 2011 to be part of supply management arrangement, but you recall 2008, when we met, we have not had this type of decision that would remove 1.8 million barrels together with our non-opec friends from the market. we can say this is the first
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in iraq has excepted to come back to the supply management arrangement within credit toi must give the leadership. i metime minister, who personally in baghdad, and who iraq, as a me that founder member of opec, will continue to be committed to the ideas of opec, and therefore despite the huge challenges they are facing within iraq now, he assured me they would not only join the consensus in the and a, but they would work for it, and yesterday we saw the fulfillment of that. dohamarie: next up is september 9 -- who will be attending from opec and non-opec? a number of member
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countries will be representing the organization in delhi. i'm in consultations with the president of the conference from qatar. we have also owned or leased non-opec member countries that are currently consulting -- i am currently consulting with the minister from russia. hopefully, we will get feedback on their side. he has been leading the consultations with the non-opec group. anne-marie: can you name any of them -- the non-opec members that have signed up to cut to make up the 600,000? i would not like to preempt them, because having the meeting on the ninth of december is to get concrete numbers from
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each one of them, and what is significant in this agreement, making this historic, is for the first time in our collaboration with non-opec, we are going to have a joint agreement that is jointly binding, in which both serve innon-opec would the monitoring committee at the administering level to ensure compliance with the agreement. this is the first time it is happening. our relationship with non-opec has evolved and developed to a real partnership going forward. and very: i know -- anne-marie: i know opec does not target price, but would you think it is going after this deal? mohammad: well, we have seen from yesterday to this afternoon, prices have responded nymex and13%, both in
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in london. we do not normally, as a matter of policy, target price. our objective has been to stimulate, jointly, with non-opec, and accelerated drop-down --an accelerated drop-down of these inventories have continued to weigh down prices. to rebalance the market, the variable of stocks will have to be addressed, and this variable has to be addressed jointly with non-opec. opec controls only 40% of the market. the rest is non-opec. we all agreed the relationship between stocks and prices -- the inverse relationship is scientifically proven. so, for us to restore the equilibrium price, we have to address the variable of stocks, and it is only by withdrawing
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supplies that we will be able to do that. all i can tell you is that equilibrium price is yet to be achieved. until we are able to bring forward this rebalancing process, we will not be able to achieve that equilibrium price, so it is a work in progress. vonnie: that was opec secretary-general mohammed barkindo earlier today in vienna. david: mexico says they must focus inward after the u.s. election results. we will hear from carlos slim on what he thinks is in store for the mexican economy post-donald trump's victory. this is bloomberg. ♪
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david: this is bloomberg markets.
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i am david gura. vonnie: and i am vonnie quinn. let's head over to abigail doolittle. she has the chart of the day. abigail: we have excellent chart of the day, but before we show it, let's set the scene. we're talking about gold -- a lot of attention going to oil because of the rise on opec, but gold has been declining. we see gold on the year is up 10%. at one point, it had been up 29% year to date. it has anders fogh rasmussen started to fall off on big dollar strength. last month, the bloomberg dollar and ask -- it has started to fall off on big dollar strength. not surprisingly, we have gold holdings on a steady decline -- down 5.5% over the last 14 days. that is the longest losing streak coming out of these etf since 2015. so, some real declines here in gold, and the question is is gold oversold -- this is the
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tv.rt -- g #b you see the trend. gold is starting to hit the middle of the channel, perhaps on its way to finding support in the middle of the channel. supporting the idea is that the relative strength index, a momentum indicator is below the 30 level, or excuse me, the dollar level. it is basically telling us gold is oversold, and in the days, weeks and months ahead, we could see a rally for gold, vonnie and david. david: time for the bloomberg business business flash -- a look at the biggest business stories in the news. most automakers in the u.s. had a better month than expected. truckl motors car and
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sales rose. backolkswagen is bouncing from its emissions scandal with sales rising. 14% --rysler sales fell much worse than analysts expected. dallas fed bank president robert caps on says gdp growth has been sluggish, but it is enough to move slack from the labor market. he also said the u.s. labor market is moving toward full employment. the former goldman sachs executive will vote on the fomc next year. breitbart news wants his readers to boycott kellogg after the cereal maker stopped advertising on the news site, whose former chairman is a top adviser to president elect donald trump. kellogg's says they will not put ads on sites that are not aligned with their values. breitbart called the cereal company un-american. theogg said a boycott is
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only sensible response. vonnie: billionaire carlos slim's, mexico richest person, says mexico needs to return its focus inward. the american movil chairman spoke closely with erik schatzker. he is talking about other issues that are positive for mexico, like he will create 25 million jobs. very many, and that he will try to grow 4.2%, and interest will be -- in 10 years. i think all of these issues are ,ery important -- if it happens it will be very good for mexico. he is also talking about getting
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down taxes for the middle class. 35%. mr. rasmussen: -- erik: for middle-class americans. carlos: middle-class americans. he is focusing to increase consumption and investment in the u.s., and a growth in consumption and inflict -- investment in the u.s. is good for mexico. if he is going to create these , it may lead to many mexicans to do all these jobs, and the most qualified neededto do the service will be from mexicans. eric: he needs the mexicans where -- here or there? mexicanse needs the
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here and there. it is very important for the consumers in the u.s. to have good prices. markets thatthe have gone into fiscal deficits since 2002 are huge. they are very big investments, and the reason they are not creating inflation is because moneys go to the financial economy, and not the real economy. he cannot put a tax of 35% on imports because to save a few thousand jobs, he will create problems for 300 million americans. erik: what about trade? as you know, he has taken an aggressive position on trade with mexico. he has said he wants to renegotiate nafta and get a better deal with for the american people. think thedo not
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negotiating something that has had more than 30 years as a dead issue. it can be a win-win. erik: how? : first, i think the u.s. should protect some of the jobs, especially the jobs that are strategic, and the goods that have high aggregate value, but i do understand how it can be produced -- low-cost products with -- erik: with high wages in the united states. carlos: with wages of $30 an hour. that is what they pay, against $15 a day. that is a big difference. behink these issues will noncompetitive, and if they try to do that, the cost for the american people will be too high.
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i would be more worried if i were an american. erik: you would be more worried as an american than a mexican? why do you say that? carlos: if you going to close the economy, it is bad. he has the ability to lose international leadership of the united states. vonnie: that was carlos slim, american movil chairman emeritus along with erik schatzker. up, in jefferson will join the "would you miss" team. david: and if you are thinking about a career change, we will show you how with your instagram account. this is bloomberg. vonnie: is that you? ♪
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david: this is bloomberg markets. i am david gura -- instagram, a forum for men and women with tens of thousands of followers snapping and sharing photos of their seemingly carefree lives -- the beaches and cocktails, it all looks so easy. max chapman discovered being famous is hard work. max joins me now from san francisco. max, you are like me -- you were like me, with a small of followers -- small amount of followers. iat did you do to become nsta-famous? out is goal was to find this something anyone can do. there are influencers -- they basically take money from marketers to try to sell stuff, and i found an agency that advise me on photography,
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matters, various other and i, you know, started posting these pictures on instagram in a different character. i also used b to try toox juice -- box to try to juice my following. it was difficult, gave me an appreciation for this stuff, and showed me how contrived it is. vonnie: we are seeing -- david: you are seeing you with your cap -- i do not know why that is not leading to more followers, but the stylists had a lot of work -- they did a lot to make you someone to follow on instagram. mexico: that hurts, but i take your point. david: how does that work -- the influencers, paying for that to happen -- normally you have to have a high threshold to be able to do that. how does one become a member of
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what you call instagram's professional class? max: these agencies normally do not talk to anyone with less than 100,000 followers. they made an exception for the purpose of my article. the interesting thing with instagram, which is, sort of, different from twitter, there is no easy way to get a following. isre is no retweets -- there no easy way to be broadcast. basically, what you have to do is jump around the internet liking things in the hopes that some of those people like you back, and try to have something that is worth looking at, which were these slightly ridiculous pictures that i, you know, took, with the help of some, you know, photography, stylists, and great lighting. and, yeah, there is certainly a genre of this. it, kind of, looks like a paparazzi shot, or something like that. the thing that was most
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discouraging was these pictures that i had taken before on instagram that i really was proud of, they did nothing compared to these slightly cheesy fashion shoots at it later, which performed much better. david: i think they look great. i am struck, as we look at your student account, some -- instagram account, some credits to lisa siegal. there is some lack of credit when i post kid smiling, not having a temper tantrum, but when i look at the bowl of granola. a beautiful bowl of granola, but i did not eat it. basically, i was posting these fashion shoots, and pictures that look like what you would expect to be on instagram. my advisor said these are terrible -- you need professional help. there is a class of photographers that basically sell, you know, lifestyle content, to instagram
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influencers, and -- as if it were, like, a magazine. that is surprising to someone who does not know this world super well. on the other hand, these influencers are, kind of, like, magazines -- many magazines. on one hand, it is dishonest, but on the other hand, lifestyle magazines are not the most honest thing in the world, either. yeah, it is part of this evolution. it is hard to know if it is sustainable. earliers.d bot bots earlier. it is hard to know if they played a role. hisd: max chafkin back in j.crew should. coming up, a preview of the job numbers tomorrow at 4:00 p.m. eastern time. this is bloomberg. ♪
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>> it is 7:00 p.m. in london. i am scarlet fu. : and i am oliver renick. welcome to "bloomberg markets." ♪
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we are live at bloomberg world headquarters in new york over the next hour, plus, where covering stories out of denver, indianapolis, london, and vienna. president-elect donald trump said to give his first major speech since being elected. he is in indiana along with his vice president-elect mike pence to ensure that terrier is keeping jobs in the state. we will look at trump and health care. companies are saying that trump will be more vicious on drug pricing than hillary clinton. we are tracking a major trend in the market, oil extending, opec rallies to bonds, one of the worse months on record. wherecheck a look at stocks are trading. abigail: we're looking at mixed trading. the dow is trading higher, on
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par for a record closing high. s&p and nasdaq are both trading lower. the clear laggard is the nasdaq. right now, the nasdaq is on pace for its worst two-day's license september 9. one thing that -- two-day slide since september 9. one thing is that the tech utilities sector are both trading lower. one is getting a left from the opec supply cut, but we have technology down and utilities down. now, our team did reach out to analysts to talk about some of the biggest drags on the tech sector, which includes facebook, alphabet, and amazon. we can see that those names are really trading lower. , but -- see them here we do not have amazon, actually. james told our team that what could be happening is snapchat
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news fortially in the an ipo, a $24 billion ipo, he said there could be something saying the same stock could act as a funding vehicle. as for a visual on the sector rotation, we look at the terminal. , a big, steep decline in blue. the question here is whether or not this will continue in the future. time will tell. as for energy, one big winner here, whiting petroleum. over the last few days, a massive rally, up more than 30%. today, strengthened on an upgrade. the firm has raised its oil forecast to $55 per barrel on the opec supply cut. upside potential for the shares of whiting petroleum, so a good one for our viewers to take a look at. scarlet: we will keep an eye on
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that one, abigail doolittle. thank you so much. oliver: this afternoon, alisa has more from our newsroom. you.ank president-elect donald trump is set to arrive in indianapolis to show up at the carrier plant, wanting to keep those jobs in the state of indiana. that is according to a person familiar with the metal who says the -- the matter who says the deal covers about 1100 workers. we will have live coverage of mr. trump's remarks. president obama is set to deliver a speech on counterterrorism on tuesday in florida. this is according to white house spokesman josh earnest. it is likely to be his final formal address before leaving office in january. the president will meet with special ops forces that mikael base.rce psychedelic mushrooms are being held as breakthroughs. studies find that cancer patients find medium and
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long-lasting release -- release from anxiety and depression when treated with psilocybin. you and report says the world's population swelled to 7.4 billion this year. the report focuses on unique challenges girls face. 89% of the world with the 125,000,010-year-olds live -- -year-oldsllion 10 live -- this is bloomberg. oliver? oliver: thank you. no shortage of drama and financial markets for november from donald trump's presidential victory to opec's landmark deal. you will see these u.s. stocks are us turn to a relative calm. meanwhile, over in europe,
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picking up again as investors brace for sunday's italian referendum. joining us now is the global head of equity strategy at shing.paribas, edmund shing. let's talk about the next event here. what do you see as the most important event in the near-term horizon? edmund: you mentioned the italian referendum. i do not think it is a massive risk because the polls have been very consistent in italy. if you look at the bond market, the bond market has also price in heavily. there is a lack of reform in firm -- in terms of italian bonds, which is a reverse of what would have been the case some months ago. bit, but,is up a frankly in italy, there will be no change. if there was a no vote, there would be no report. oliver: ok. edmund: what really changes?
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not a lot. the important event will be in the netherlands. there is an election in the middle of march next year, and that is very important because the leading party in the polls is an extreme right-wing policy whose leader is actually standing trial. that is quite dramatic, and he will be part of the coalition government is the election turns out as the polls forecast. scarlet: but that election is a long way off from now, so we have got a lot of empty space to fill until then. you have got political risks built in with president-elect that has a lot to say but does not have a lot of detail to back it up. willay that yield curves largely determine where global equities go. which yield curves? are we talking treasuries, european bonds? the ecb has been a backflow for europe. edmund: the ecb will be key
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here because the eurozone bonds, they are buying a billion bonds a month. that may be scaled back in march, but nevertheless, thereby a lot. here in the u.s., we do not have the fed providing the same for the bond market. at the same time, if you look at the chinese or japanese, they are not buying treasuries. the chinese are letting their currency depreciate because of the dollar, which means they do not need to buy as many treasuries. the u.s. yield curve will be determinate, and my colleagues are feeling pretty bearish. lot of so i think that a the concerns surrounding the yield curve and how it pertains to equities is because a lot of money in the first half of the year to go to the bond replacements. i want to connect two points. i want to look at the vix curve. you are big on derivatives at bmp. the day before -- at bnp. the day before the election, the orange curve, this is where it
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is currently. everything here from to month out is looking pretty much exactly the same way it did, so what does that tell you about the concerns that, while maybe in the short term we are a little bit relieved, but there are a lot of questions out there? edmund: there are a lot of questions, no doubt. it will take quite some time for the cloud to pop in for us to get some clarity. president-elect trump needs to to knowurated, we need all the members of the administration, and then we need to know the policy. we need to know about regulation. how far will the go with health care reform? what is he going to do about dodd-frank? what is he going to do about taxes? we think he does know to what degree he will back up his rhetoric with action. i think that is a very big question. will work withhe congress and paul ryan, for instance, is another question, because from my point of view coming from europe, we see president trump as more of an independent candidate who has
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usurped the republican candidacy, now being president. establishmentn guy because that was his appeal, but now he has to work with the establishment. how is that going to work out? scarlet: given all of these questions, what market narrative makes sense to you right now, and what does not make sense? edmund: i have to say, if i look 2000 against the s&p 500, there was a reversal from what you normally see, the russell underperformed. since then, it has massively outperformed, so the question is -- what happens from here? it has gone so fast, so far. structurally, the russell will outperformed the s&p because domestic growth is what will benefit president trump, we think. the stronger dollar, which we expect to see as well, will benefit the s&p 500. scarlet: i just want to turn
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away from the u.s. for a moment. francois hollande says he will not run for presidency in 2017. i guess it should not be that big of a surprise given his approval rating was, what, 4%, 5%? what about the french elections? edmund: i have to be careful what i say because we are a french franc, but i will say that people -- bank, but i will say that people underestimate the french electoral system. invokes -- it works in favor of the centric policy and against extremist grabbing power. that is the way the electoral system works. system,have a two-round so you have the first round where you can express a protest vote, and then you have a second round where you can vote. oliver: we love politics.
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i have one more question about markets, talking but equities, we had a big jump in oil. this is basically looking at the performance of the small cap energy stocks versus the large-cap. when they cross the blue line, that is when they are outperforming. we are seeing not only the rally in small cap's that you were talking about in general, but also some more of the domestic energy trading companies. shell companies as you have an opec deal? edmund: what you are looking out with smart caps is exploration and production-focused, so the exxon, moguls of the world, large-cap. but this is what you would expect. oil price is up particularly unexpectedly, small cap should ' are aorm, however, mlp much better way because they ares an infrastructure trade.
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they depend on the fact that oil and gas production will rise, and they will be transported to the coast. that's me is a much better play and has a very good yield as well. oliver: interesting. so do not be tinted by the short run. edmund shing, head of global strategy at bnp paribas, thank you. three cap breaking news, president francois hollande will not run for reelection. this is bloomberg. ♪
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oliver: mrs. "bloomberg markets ." we have breaking news -- france president front wall on will not -- french president francois hollande will not run for
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reelection. how does this affect the ongoing race in france? >> it is a very interesting question because, french president francois hollande has been very criticized in the past few months. there was an opinion poll a few weeks ago, saying his popularity is a massiveso it poll for the right-wing candidates. we can assume as well that there ,ill be a lot of candidates possibly the prime minister. he has been a critic of francois hollande for the last week or so. scarlet: what does it mean in terms of the socialist party's candidate? do we presume that the prime
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minister will be running or the former economics minister? manuel valls is already running, he has called himself a candidate, but he wants to be an independent candidate. he will be a candidate. he will be behind marine le pen, and we can of course assume there will be another section of candidates running as well, and the primaries will be happening at the end of january in france. oliver: all right, caroline, thank you. scarlet: back here at home, president-elect donald trump this week, his cabinet position is taking place.
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pick is a bone's to the health care industry. congressman price will oversee the repeal of the affordable care act next year. for more on what that move could mean for investors, we're joined by ethan lovell, co-portfolio manager of the janus life-sciences fund. he joins us now from denver. great to see you, ethan. donald trump is that a lot of things about obamacare. he wants to repeal the entire acts, the law, he wants to keep parts of it, whether it is previously existing conditions or coverage for adult children. what does the appointment of price tell you? for having me. i think the selection of tom price as senior surgery for health and human services is a huge statement in terms of
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deregulating the health care system we have on the avoidable care act. he is a former orthopedic surgeon. if you are familiar with the those whoies of undertake that discipline, you would realize that he is an entrepreneur, he wants to put the patients first, and that will be the directive that he and paul ryan put forward when they worked to put together the repeal and replace plan under the trumpet administration. oliver: tell us a little bit about how this breakdown for the sector -- we talk about people making the mistake of speaking of health care to generally. you have insurance providers, services, suppliers. what for you will be the biggest winner in the biggest loser here? particular, wein are focused on two areas -- one is biotechnology where, against a backdrop of the threat of price regulation, there has still been a tremendous amount of innovation taking place. newad dated today out for a
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technology called engineered t cells, that were terrific, a brand-new way of approaching how we will treat cancer. all of this is taking place direct the fears of price negotiations, which obviously goes away under a republican administration. i think the other area you would focus on immediately is managed care where deregulation and the elimination of the insurance tax are to potentially very important drivers of upside, from an operational point of view as we go forward. scarlet: there are a lot of costs built up in complying with the affordable care act, right? a lot of man-hours spent on it. ethan: absolutely. scarlet: how quickly do you think costs might rise in transition to whatever health care plan we have in the future? companies cannot necessarily count on reducing costs as a way to boost profits, can they? disagree to i might a limited extent.
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a lot of what was put through under the affordable care act was implemented through cms and through presidential executive order, so i think when trump takes office, you know, he is going to be either reversing a lot of what was done under the obama administration directly himself or directing the head of health and human services and the head of cms to put through plans that would repeal some of the encumbering issues put forth by -- you know, if agencies like the cmmi, which is a new organization that was put forth by obamacare we will see some immediate impact, and then longer term, we will have this repeal and replace plan put through, and with republicans in power, i think repeal is almost assured, and that will get replaced with -- on a schedule to be implemented sometimes in 2019. oliver: some of the companies
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here in health care have had a pretty rough year. a few of the names in your own portfolio have been hit pretty hard, some of the specialty bio farms. is there anything you can say in terms of your positioning? ethan: back to the earlier point of biotechnology being an area that we really see some tremendous innovation taking place, that is probably the area we would focus on first. quite surprising, we have seen a lot of follow-through in a lot of areas that would benefit from a trump administration, but other than managed care, health care has not performed that well. if you look at names like amgen, we will see some new data coming forth for those companies in the relatively near future. focusing on amgen, a have a study that should report out very shortly that we think is going to be highly positive for a new category of cardiovascular drugs that is just getting started and has a multiyear runway. we're very optimistic for biotech, as i indicated, and that will be the area where we
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are considering doubling down or adding to the vision. scarlet: perhaps doubling down on biotech, ethan lovell, portfolio manager at janus capital, thank you. ahead, a speech from president-elect donald trump from the carrier plant in indianapolis. trump will be giving a speech from the factory in indiana where they are set to announce that they are keeping jobs in the state. we will have more on that soon. this is bloomberg. ♪
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scarlet: president-elect donald trump set to take a victory lap today in indianapolis. joining us now from our washington bureau is tim pawlenty, a former governor of minnesota. governor, the president-elect will be talking about how carrier has revoked his position to move jobs to mexico. it is probably good public relations, especially since he
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is not yet taken office. we do not know what he has offered carrier. doesn't even matter at this point? this is bloomberg. ♪ tim -- does it even matter at this point? it is already in the media consumption, and it will be in the win column for president elect trump and vice president elect mike pence. a presidente've got talking about keeping jobs here, it has already been a big part of this campaign, how to see go concrete waya where tim pawlenty might say, "hey, this is a good way to do it"? tim: it is a good way to do if you're in all states incentives to keep jobs in their states to varying degrees. it would be good if everybody focused on one level playing field. they do have to do that here it on the founding father said look, the states or the laboratories of democracy --
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they should compete against each other. however, they should invest in their stake are and this is consistent with a long-standing tradition of state competing with each other to keep jobs. donald trump, i would guess, owner, about carrier's which is a big contractor with the federal government for other purposes. if i were the president-elect, i might say, "look, you might want to look at your whole relationship beyond air-conditioning, because you might want to do business in the future." scarlet: all good points. lenty, stick around. we have more to talk to you -- more to talk with you about your you can see a live shot of where president-elect trump will be speaking. this is bloomberg. ♪
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oliver: this is "bloomberg markets." i am oliver ringing.
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president-elect donald trump is -- to speak after a scarlet: we will keep you posted on when he takes the stage. meantime, let's get a check on commodity markets, which are closing in new york. abigail doolittle has the latest. abigail: how focuses oil, of course one of the big stories this week after opec did reach a deal to cut supply for the first time in eight years. as a result, we have oil absolutely rally mode, up more than 13% over the last two days to it we see this beautiful uptrend, the best today's for -- two-days for oil. a one-month chart come in blue, the s&p 500, and in white, the s&p 500 energy sector. the opecat ahead of deal, we basically had energy and the s&p 500 and the broader market trading in tandem. after the opening deal, energy
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has really taken off. it appears that the trend could continue based on the work of analyststegists and who are raising their oil forecasts. we also have natural gas up nicely, up nearly 5% on the day, up 90 is any rope. it is at its -- up 9 days in a row. it is at its peak. chesapeake, eog resources, all up. we had pipers saying he is bullish on the natural gas companies, even if they are "hated," not so hated today. a nice rally today, scarlet and on over -- and oliver. scarlet: thanks, abigail doolittle. trump.et back to donald with us is tim pawlenty, the former governor of minnesota.
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also with us is bloomberg politics reporter brendan greeley. brendan, let's start with you. the governor was talking about how this is a political victory, but i wonder -- is this good economics for the government, or is the president-elect's to intervene is such a microlevel? brendan: i have not had anybody say to me, "yes, this is sound economics." usually you have the same rules and tax incentives for every company, no matter what. that said, this is relatively small potatoes as far as what states do. i looked this afternoon at the data, and this is not even the biggest deal in indiana this year. that goes to great lakes capital, which was going to build it in fort wayne, indiana, and they got 8.6 million dollars. this is relatively small in terms of what happened. when you are looking in indiana, again, indiana alone over the course of the last 10 years has guys in hundred million dollar incentives that have gone
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to, i think, general motors. states are constantly competing to get factories to move, and this is part of what happens. oliver: so maybe small potatoes here. i want to bring in tim because as a former politician here, give us some insight in what is going on in trump's mind. symbolic thing, is he aware that it is largely symbolic, or does he think this is the way to pursue this kind of situation, as he has highlighted over and over again? tim: for those 1000 workers and their families in terms of their grocery bills and health care premiums, it is more than embolic. bread-and-butter, -- it is more than symbolic. bread-and-butter, steak and potatoes stuff, it is nothing to sneeze at. beyond that, you have got to recognize mike pence's role. substance ofe the this was done at the state level by governor pence and his team. the real credit should go to him. but, of course, i'm sure the president was involved in
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encouraging it, and he may have had some subtle suggestion to the parent company of carrier, as i said earlier. you may want to look at this more holistically than just air-conditioning. david: i have to say -- brendan: i have to say, i agree with the governor. the president happens to be carrier plans to have a press conference, excuse me, an event, but i have right here a list of the states this year that one bank what is called the governor's cup. if you are not familiar with this magazine, it looks at how putanies choose where to their plans. indiana this year is that place number 10. see., governor, i did not minnesota anywhere on that list perhaps that is not your fault, but talk to me about what you have to do as a governor to pull all the strands together to actually come up with a plan to
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encourage businesses to put factories with you? tim: most of programs in place where the legislature while authorize and fund programs that say if you meet certain criteria, you might be eligible for these loans some of these tax incentives, -- some of these loans, these tax incentives, and if it gets to be a certain level or high-profile, the governor himself or herself will get involved in negotiations. i certainly did that when i was governor. of course of it actually happens, nobody likes their ribbon cuttings better than politicians, who like to show up and say, "look what i did." but 1300 jobsd, still going to mexico, so there still might be work to do with respect to those jobs. scarlet: a lot has to do with demographics. contributorview pointed out that it is not really support job creation. you have an older and therefore
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more expensive workforce and no growth in the labor force in general. companies that are looking to invest, capital investments, need to open a factory with 5, 10, 20 years in mind, looking down into the future. so this is a bigger issue than saving 1000 jobs here and 100 jobs there, isn't it? tim: it is, but i do think donald trump is onto something. when a company is thinking about moving, hey, look, if you are going to move to mexico, you might want to think about some of the consequences we might impose if you want to put those products back in the united states. you also might want to think about some of the other things we could do at a federal level to make it more inviting here or, friendly,m, some of the other consequences you might experience if you do this. so a more aggressive approach to get companies to think about how in when they move these jobs around is not a bad thing, as long as it is done appropriately. oliver: one thing that we talked a little bit about before,
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, was president's going and taking individual companies and businesses, and in some senses it reminded us of president obama's administration. tell us about what ucf similarities and differences between the two. would loveonomists both under failures of public choice theory, and economic theory -- somebody won a nobel prize for it in 1986. actors in government are just as susceptible to market forces as actors in the market. pawlenty just said, you want to be at the ribbon cutting and take credit. wascomplete about solyndra the president was picking winners and losers. you were not supposed to do that. but all governors do, all presidents do, write gekko we like to think that we are beyond
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what we call industrial policy, but one thing, one push from president obama's administration has been a policy to encourage the development of green energy. this is, again, something that no government is immune from. one of the things that i'm curious to see in a administration is there will be industrial policy. they will not collect that, but what is industrial policy going to be? what values are we going to choose as a nation to express through subsidies? do we want to keep manufacturing here? how do we do that? the bigger question is, and he goes back to governor pawlenty, if you are trying to make these decisions, you want to make the economy of your state grow. that is the goal, that is the game. what is a better way to do it -- by going company by company or by saying, "we are going to educate people, we're going to infrastructure"? tim: ideallytim:, you would have an environment where people compete on a state-based, macroeconomic considerations, see you do not have a company by
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company enticement. and notably, when company is going to leave, do you want to stand on principle, the macro consistency of your tax code, or would you like to save 3000 jobs? macroeconomicay consistency, and i hear donald trumps voice in my ear going, "nerd." irony whenis some people talk about "let's get rid of crony capitalism, but that being, to your right, what is coming -- crony capitalism," but that being said, to your point, accessing jobs today and tomorrow, and with artificial intelligence, algorithms, machine learning, robotics, automation -- you know, we are just beginning to see the destruction, and not just blue-collar job, but i think some of the lower and mid-level white-collar jobs. that is why part of the policy should not just be about tax. what canto do about -- we do as urgently as possible to get everybody's skills and
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education levels ready for the next challenge, which you cannot access without a replicant level of skills? scarlet: no, you cannot come and those are long-term issues that will not be resolved in the next 12 months for sure. i wonder, though, and again, we do not know the details to what exactly donald trump traded off with carrier in order for these tops to remain in indiana. and an't there a risk moral hazard being created here in that other companies that want tax concessions can threaten to move their jobs to mexico as well? tim: yes. but i think you can resolve that by having some consistency around it, saying, for example, you do this, and there are consequences for the cost of , or company moving back in when you try to export him out of mexico somewhere else and then back in, that will not be allowed or favored anymore. company, i think it they have got a lot of
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business with the federal government. again, you have got to do this appropriately, but the suggestion that, do you want to cannibalize your air-conditioning business in the u.s.? we will not look too favorably upon you when you come back and want to do business. i think that is fair if it is done legally and ethically. oliver: one thing here, brendan, as we get closer to his announcement here, as the hammer come down as to whether or not this is the way to go about this sort of policy, or is this something that can come out in detail here you ? hishear from trump and team, maybe this amount of money when here, or here is the tax code exactly. what will be the thing here? brendan: that is a great question. before the cameras were on, the governor and i were talking about how much of this is a straight up grants, is it a loan guarantee, or is it an actual tax abatement? if it is a tax abatement, we can say ok, here is a hint of sort
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of what kind of administration the new administration is going to be. i am really curious to find out how these promises of future regulatory relief, you know, what they add up to, what that actually means. you know, the trump campaign about talked a lot reducing regulation, reducing it on the financial services industry, reducing it on energy producers, right, so what is it going to be for manufacturers? what can you reduce to make it easier to make things here in the u.s. -- i do not think we have that answer yet. so to actually answer your question, the bigger question is $6 million from the state of indiana is composed of, but what other things were promised that will apply to relation more generally? scarlet: the bigger picture is donald trump is using his bully pulpit to pressure companies to fall in line with what he thinks is the right thing for the u.s. economy. governor, as you can see, there is a live shot of the carrier
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factory, the president-elect is touring the factory. governor, i wonder if there is a historical analogue for the kind of interventionist effort being put forth by donald trump? tim: there is certainly an analog or a precedent for a governor doing it, and again, i think most of the substance here is really to mike pence and to the state, with donald trump kind of hovering over the discussion, so we should put that into context. there is a lot of precedents for that. the only thing i would say from a pr standpoint and what this looks like, there is nothing ane powerful than fueling existing narrative, and his existing in order is, "i will get better deals, i will get carrier drops back here, and by the way, i will be tougher on these kinds of things," so it looks like his narrative has just been reinforced. interesting,re
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but friendly, that will get glossed over to he is doing what he said he did. i think in real estate, they call it something you do deal by deal. policy is nothing you do deal by deal. you cannot do enough deals to save enough jobs. i have a question for the governor -- it is more related to your current job, the financial services roundtable. when you are bringing jobs to a state, how important is credit at the state level? the state level, banks, most of them, are either state-chartered or federal-chartered, but they really respond to regulation about how much money can you lend and how comfortable are you lending. you have to strike a balance between reckless lending and responsible lending, and of course, one thing that can fuel the economy is more lending. some of the banks would say the regulations, while appropriate, are so overdone that if you could make them more reasonable while keeping consumer and economic protection in place, if
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you believe and give us a little relief, we could lend more. a responsible access to credit is a really important ingredient to economic growth and one of the reasons we probably have statement economic growth is there is not as much responsible lending as there could be if we had sensible regulatory reform. scarlet: on that note, we want to thank tim pawlenty, he is of course, the former governor of minnesota. and thanks to bloomberg economics reporter brendan greeley, both joining us from washington. we are awaiting the event to bring you the president-elect speech's what happens at the carrier factory in indianapolis, getting ready to announce carrier posted decision to carrier'sving -- decision to reverse moving jobs to mexico. >let's start with breaking news from france. >> french president francois hollande said he will not seek another term in 2017. the embattled president has seen his popularity hit record lows
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after a series of terrorist attacks. he is leaving the country in good shape. andays france's debt deficit situation is improving, and so is the nation's job market. new jersey governor chris christie is looking to leave the republican national committee. he had told donald trump's transition team that he is interested in the job, according to politico. retiredia director and general david trias could face unique challenges if he is selected as u.s. secretary of state. last year, petraeus pleaded guilty to a misdemeanor charge of mishandling classified information, and he is on probation for two years. that would require permission from his probation officer to travel. he would also be subjected to warrantless searches by his probation officer. five arrests have been made in connection with a massive operation aimed at knocking out a cybercrime unit.
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this sweep resulted in a seizure of 39 servers used by avalanche. ofdreds of the own aims -- domains have been seized. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 2600 countries. this is bloomberg. oliver: we are awaiting president elect donald trump as he is touring the carrier plant in indianapolis. this is bloomberg. ♪
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scarlet: this is "bloomberg markets." i am scarlet fu. president-elect donald trump set to speak any moment from the
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carrier factory in indianapolis. he is touting his victory in getting carrier to keep more than 1000 jobs in indiana instead of moving them to mexico. trump has been touring the plant at this hour. he will follow comments from united technologies, the parent company of carrier. let's head over to abigail doolittle. abigail: the sector etf we are looking at is glv or the gold trust. it is down more than 1% over the last two days. you can see the decline here. perhaps commodity money is flowing into the energy sector, plus, we have had dollar strength. the bloomberg dollar index hit a record high in november, and business showing in holdings declining in the gold etf, down 14 days in a row, the longest period of withdrawals for the gold etf since 2015. down 5.5% over that time period. on the year, this is now showing gold is actually up on the year
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by about 10%, but it is at its lowest level since about february, really giving up the gains we saw into july. the question of force could be -- what is next for gold? we go into the bloomberg, we look at g#btv. gold is on top. we see gold's nominal peak back in 2011. it appears that gold could be hitting the support of the middle of this range, and supporting that is the relative strength index. investors use this momentum as a buy or sell signal. below 30, the rsi is suggesting that gold is in fact oversold and that perhaps investors will soon be flocking back to gold and bringing its scepack higher, scarlet -- it price back higher, scarlet and oliver. scarlet: thank you, abigail. we are awaiting donald trump's
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speech at carrier in indianapolis. this is bloomberg. ♪
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oliver: this is "bloomberg markets." oliver rennick. right now, you are looking at the carrier factory. donald is set to speak any moment now. scarlet: a lot of economic data is coming out today before the big jobs report tomorrow. much of it is pretty encouraging. >> it has been a good week all around. today has been the second best day, strongeek, pmi out of china, strong out of europe, and good today-. things are doing all right. scarlet: there is greg hayes, the ceo of united technologies, which is parent company of carrier. better thans
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expected, also, a pickup from the same time last month. prices paid as the inflation measure we were looking after that is 54.5, which is what economists were looking at. the metrics have been largely worn out. joe: i was having this conversation with a colleague. we saw a jump in rates close to the election, and maybe it is not about trump and fiscal stimulus. maybe it is about people reacting to data that has been building for a while, which is that we are deftly not going data welation by the see at all. maybe it is a snap for people can reframe their viewpoint, a fresh look to what is going on. maybe that partly explains what we are seeing in rates, which continue to rise. oliver: a catalyst to get them moving. joe: we have been talking about these numbers for a while. guys, inflation is not raging, but it is building. markets were ignoring it for the
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most part completely. scarlet: yields have started to rise since august. joe: yeah. scarlet: people were not totally sure it would continue moving in that direction until after the election. you can see vice president-elect mike pence, the current governor of indiana, speaking in indianapolis. is, of poor the -- he course, the sitting governor, impose a monthly he -- and presumably made some sort of deal. oliver: the company, carrier, is going to get a sort of a tax break. $10 million over the next seven years or so. joe: which is not really a lot. all ofould save these jobs for $700, it is not that bad. the question is -- can the administration building policy that can sustain this kind of stuff? because obviously, one-off deals like this will not scale. from the purely political perspective, it is a win for donald trump in the street news.
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oliver: it fits right into the narrative that he likes. right, joel weisenthal, thank you so much for giving us your take on the economic data. you can watch him on "what'd you miss?" later on today. meantime, we want to check in with ben brody, he is at carrier as vice president-elect mike pence speaks at the carrier factory in indianapolis. what kind oft know trade-offs the trump administration or trump team has made to get carrier to keep jobs in indiana, but presumably, there were some trade-offs. does it matter politically? ben: i know the democrats feel that it matters. we had a pretty amazing op-ed by bernie sanders this morning where he basically said that this was the opposite of what donald trump promised to do. this was not a pro-worker policy where donald trump is using the bully pulpit of the presidency to ensure the growth of the middle class -- this is
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basically another form of corporate giveaway. that is how bernie sanders was portraying it. i have heard that certainly from other democrats today. so if that message is going to sort of unite democrats a little bit more broadly, yes, it does matter politically in terms of how democrats respond to this. i think a lot of people have been saying today, you know, it is hard to criticize the president or the president-elect for saving people's jobs. saw that bernie sanders chimed in and wrote an opinion piece in the "washington post." who will be leading the discussion on the very micro type events? this is not the first time he did this as well. this is the second time, and democrats are obvious the reacting here. think sanders is definitely going to be a person who is speaking to this.
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in theclearly the person democratic primary who was speaking primarily to some of these worker issues or some of the economic stagnation, malaise that i think was driving the election a lot more sometimes than we realized here from washington or from new york. i think elizabeth warren will be speaking particularly with her banking focus. it depends, you know. we are seeing a scramble right now for leadership of the democratic party. house minority leader nancy pelosi, sort of recently reelected to that position, so we know she will be continuing to bring this message out. but we do not know necessarily who else will fill in some of these lower slots down and who will rise to be the voice. sometimes that happens organically -- people latch onto one person. scarlet: yeah, people latch onto one person, but as you know, there is a lot of turmoil among the democrats, certainly in the house. --erra will be facing harris
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replacing harris as attorney general. why is this significant for the democratic presence in the house? ben: we keep talking about, the young leadership in the house that is poised to take over, just as soon as the democrats change their rules and the leadership structure and the committee structure becomes a little more flexible, a little more merit-based, and a little less based on selena -- seniority. we have been talking about that for a number of cycles and the democrats have taken punishing losses. they have taken them sometimes during the bush administration and sometimes during the clinton administration. that time, it has been roughly the same leadership team. upught we would somehow come whenever that hot air started to rise. not knowlly said i do if i could get a promotion here in bc d.c as the attorney
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general. in california, he has a lot of power over consumers. the california attorney general's ago after a lot of consumer issues and they can settle a lot of policy. >> we got some information about trump's administration starting to should look -- trickle through in the past weeks. probably did not happen overnight. some of the leaders that trump has told us about, how they might feel about this sort of approach solving the problems with jobs going abroad, how do they fit in with the economic vision of some of the people? >> the key thing we have been watching the past few days as the four treasury secretary almost just as much, that has been then news in the past couple of days. the thing we about, these guys .ame out very earlier on
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people said he had no chance politically, they said no. economic stagnation, he has tapped into it, he speaks to it, he gets it. it is what is going on on the ground. those guys really said that had to be driving the conversation. cabinet department, they will play big role along with u.s. trade reps in determining how trump deals with trade deals that are in place. will go from some of the multilateral regional approaches to the bilateral does nots, slow and necessarily make a lot of changes at any given moment. he said that as a way to get a bigger deal. interestings because he has come out and he has not been somebody who we saw
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having a lot of policies. us.t of a cipher for we knew he was in the running but did not necessarily know what he would do. it is interesting now he is talking a lot about the tax cuts. a little less to do with trade but he is talking about his tax cuts and saying the way they will work, there will be a rate cut of the top but they will close so many loopholes, it will be concentrated in the middle. us aboutrting to tell how he envisions the tax plan. scarlet: thank you for joining us from our d.c. bureau. looking at vice president elect mike pence wrapping up his comments and bringing donald trump on stage at the factory in indianapolis. president-elect is supposed to take his victory lap. let's listen in. trump: thank you very much. i love that red hat. thank you, everybody. i want to thank all of the indignant -- the dignitaries
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with us today. mayor, weekt, the -- he won very much so we are proud of him. mike has been such a wise decision for me. when people were saying, i do not know how good is he at yes,ion-making, they say but he picked mike pence, that is a good decision. everybody loves mike. he has become some a very special. when i called him, he was right there. well,ked out just as other than i would have liked to have an answer a year-and-a-half ago. we have tremendous love affair in the state of indiana.
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you remember this was going to be the firewall. this is where they were going to stop trump, right? that did not work out too well. for me, it was a firewall. by 16 points. the election we won by almost 20 points. that is pretty great. i just love the incredible people. so i got involved because of the love affair i have had, this has been a very special day to us, ad i will never forget about week ago, i was watching the nightly news, i will not say which one. i do not want to give them credit because i do not like them much, i will be honest. [laughter] not like them, not even a little bit. but they were doing a story and i said, that is something. i want to see that. worker, a gentleman, a
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a great guy, a handsome guy. knows like he did not even they were leaving. he said something to the effect, we are not leaving. usause donald trump promised that we are not leaving. i never thought i made that promise. not with carrier. i made it for everybody else. i did not make it really for carrier. and he was such a believer. he was such a great guy. he said i had been with donald trump since the beginning and he made the statement that carrier is not going anywhere, they are not leaving. i'm saying to myself man, and i leave.arrier will never but that was a euphemism. i was talking about carrier like all other companies from here on in. they made the decision a year-and-a-half ago.
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he believed that i could understand it. not meane it but i did it quite that way. whoever that guy was, was he in the room by any chance? you did a great job. that is fantastic. and i love your shirt. put it on. go ahead. he meant that, didn't he? he really meant it. he said the first thing i will do, i called the head of carrier, a great guy. i always learned i have got to call the top. he is a great executive.
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united technologies is one of the top 50 companies anywhere in the world. they make anything that's many things other than air-conditioners. i had heard of him but i had never met him. phone.ed up the "mr. president-elect, how are you?" it is wonderful to win. lost, i would have tried but i think it would have been tougher. i called greg and i said, it is really important. we have to do something. we have a lot of people leaving. and you have to understand we cannot allow this to happen anymore with our country. so many jobs are leaving and going to other countries, not
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just mexico. many other countries. i wrote down some numbers that are incredible. the numbers of manufacturing jobs that are lost, especially the rust belt, which is so but we are losing companies, it is unbelievable to one after another, just one after another. i said you have got to help us out here and we have got to sit down and do something. because we just cannot let it happen. he was incredible. he said i understand and i wish i made this a year-and-a-half ago. it would have been an easier call. hell yourwhoever the son is, -- this room is not big enough. know who arranged that one. we just visited 1000 people in the factory, in the plant.
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unitedtell you, the technologies and carrier stepped it up and now they are keeping over 1100 people, which is so great. it is so great. [applause] people.p: can i see the i shook hands with a lot of the people. making so many air-conditioners, you did not want to have them come off for a half hour. he is ruthless. but that is ok. you know, i did say one thing to the carrier folks and to the united technologies folks. i said the goodwill you have engendered by doing this all over the world, frank, but you watch country, how fast you will make it out because so many people will be buying carrier air-conditioners. we have had such help here. no one can ever heard of bobby
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knight. how great is bobby knight? , we had such incredible support. a an of my said during the primaries, if you could get coach knight -- i said coach mike called me a year before i decided to run. i said if you ever run, i am sporting you. i said, thanks, coach, i just do not know if i will be doing it. knight as farobby as we are concerned in indiana, is that right? two or three championships, , and he wasd-medal unbelievable. he would not stop. he was going all over. the greatest guy. had into an arena and we 16,000 people inside, outside, 10,000 outside. before theree weeks
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primary and i said how would we lose indiana with this? we won big. those folks really held with indiana and a lot of other places. technologies has stepped up. i have to say this. they did it in a nice and professional way and they will spend so much money renovating the plant. i said, say that number. he said 16 million. is 16.imum number in my opinion, it would be a lot more than that it he said, i would rather say the lower number. i would rather him say the higher number. a difference in philosophy. both are ok. they will spend a lot of money on the plant. i said companies are not going to leave the united states anymore without consequences. with -- is not going to happen. i will tell you right now.
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we are losing so much. one thing we are doing to keep them is we will be lowering from down to 15%, which would take us from the highest tax nation in the world, terrible for business, to the lower tax. not the lowest yet at the lower tax. the other thing we are doing is regulations. greg and your folks, you would probably say regulations would be worse for you than even the high taxes, the biggest surprise of the whole political experience. i thought taxes would be number one. believe me, these great leaders of industry and even small business people who are just being crushed, if they had their choice between lower taxes and a massive cutting of regulations, they would take the regulations. i do not know how you feel about that, greg.
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it,ote down because i heard since about six years ago, 260 new federal regulations have passed, 53 of which affect the plant. 53 new regulations, massively expensive, and probably none of them amount to anything in terms of safety or the things you would have regulations for. six of the air-conditioning companies right now are located in mexico, six of eight. of the supply chain for mexico, 80%, is located in mexico. itare not going to have anymore. i was there three months ago with the president of mexico. a terrific guy. a fairhave to have shake. we're not getting anything. after is a total and complete
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disaster. total and complete disaster. a one lane highway into mexico. nothing coming our way. everything going their way. i do not have to mention who signed it anymore. so nice. i do not have to mention who backed it anymore, right? one-week -- one-way street and it will be changed. they're one of things that made me so happy, when greg said they have over 10,000 jobs they will be producing in the near future and now looking into the united states is that of outside in the united states where almost all those jobs would have gone. to do thisi wanted particular conference is it is so great. the big beautiful plant behind even more beautiful in about seven months from now, they are
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so happy, they will have a great christmas. that is most important. also, i wanted to let the other companies know that we will do great is this. there is no reason for them to leave anymore. your taxes will be at the very low end and the unnecessary regulations will be gone. .e need regulations most of the regulations are nonsense. if this -- writing regulations has become a major industry. these companies will not be leaving anymore. they will not be taking people's hearts out, they are not going to be announcing like they did at carrier that they are closing up and moving to mexico, over 1100 jobs. that number is going to go up substantially as they expand the area, the plant. 1100 will be a minimum number. everybody.hank
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i specifically want to thank everybody i met backstage, incredible people. spirit and the love. the people are all crying. it has taken us a little while. think of this. i do not think we even announced we were running when the deal was originally announced. end, -- that makes it much more difficult. it is hard to negotiate where a plant is built. he said the plant is almost built and i said, greg, i do not care. it does not make any difference. do not worry about it. what are we going to do with the plant? rent it, sell it, knock it down. i do not care. they will do fine with their plant. we will figure it out. but where we are starting is from a much easier place. it is hard a year-and-a-half ago to make an announcement and all of that work is done, which is
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why i have such respect. great business people have flexibility. line, we arehard not going to move, flexibility is why they have done so well over the years. muche not going to need so flexibility because we will have a feature -- a situation where they will know number one that we treat them well and number two, there will be consequences. they will be taxed heavily at the border if they want to leave and fire all those people, different countries, and they think they will sell the product over the border, which will be a strong border, a very strong quarter, believe me. [applause] and i think companies, we're going to build a wall. trust me, we are going to build a wall. we will have doors in the wall, on people will come through
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worker park -- worker permits. a lot of people coming through. it will become through a legal process. i just want to thank all of the people at the united technologies. how many air-conditioning units he sold in the last six months from today. i think it will be a number that would even surprise you folks because of the tremendous goodwill you have created. i want to thank all of the workers at this plant, all of the carrier workers, most important way. [applause] thank my: i want to great, great vice president-elect. i tell you what, one of the
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really good decisions, i want to thank mike. we will be doing this. they say it is not presidential to call up these massive leaders is verypirit i think it presidential. if it is not presidential, that is ok. i actually like doing it. we will have a lot of great people who also do it and do it like i do it. we have a lot of phone calls when they say they are thinking about leaving this country because they will not leave this country and the workers will keep their jobs. they can negotiate good deals with the different states and all of that. believe in the country will be very difficult. i want to thank everybody. we love you folks. i want to really thank the people of indiana. we had two massive victories in a very short time. all of the workers have a great
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christmas and a fantastic new year. thank you. thank you very much. you can see president-elect donald trump finishing up his remarks, the first public speech since winning the election on november 8. charm team deal the has negotiated, according to our reporting and the company, a state incentive package in about $7 million over multiple years, at jefferies, they said moving the operations to mexico wouldn't save the united million per$65 year. two cents per share. >> obviously, they have incentive to work with the government. upon somes contingent factors according to the reporting including employment jobs, i guess they want to make
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sure what you're getting from the tax break will not just go to buying the shares. i want to point out incentive with the government here is there is quite a bit of money they get from the u.s. government, always an opportunity to do it really quick. for the parent company, basically what they're doing is looking at the balance sheet and saying revenues are about 10% from u.s. government. break it down by segment. there you go. this is older, 2009. .p to speed, it is about 10% 5.6 billion total revenue in fiscal year 2016. you can see they want to keep this on their side. that will not always be the case. every single company trump has to deal with. equity -- that under break down by region.
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scarlet: donald trump finishing up his remarks. >> there you go. a quick check on markets with abigail doolittle. abigail: we are at mixed trade action. the dow is trading higher on another record close. you can see the s&p 500 and the nasdaq are lower. quite a bit, down one .5%. huge diversions between the dow and the nasdaq. that really stands out. the nasdaq is on pace for its worst decline since december 9. as for where the money is going into, most likely the energy complex. nearly three cents on the day. we see the s&p energy sector from alling that are of this. where's the money coming from?
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most likely technology. we see shares of microsoft and facebook trading lower and part of that could be the sector rotation according to bloomberg intelligence analysts, they tend to react on the big news, ending on a bright spot, starting to end on a bright spot, another reason the dow is moving toward a record high, rotating into the financials trading higher, this is why. the 10 year yield is making an amazing move today. the 10 year yield had traded higher earlier, 10 basis points reflected in red. it signals a selloff in bonds. move. a little bit of a a big spike in move. making more money when they do lend. scarlet: thank you so much. >> carnival's cruise line
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pleading guilty to charges, it will pay about $40 million and were pressing it or say is the .argest u.s. decline investigators found more than 4000 gallons of waste off the coast of england in 2013. buying cardinal commerce in a move to improve security in the e-commerce transaction. issuing to authenticate car purchases off-line. the opposition will help the giant improve security for customers and connected like phone and wearable devices. credit suisse is cutting nearly 200 jobs in london this week for lower costs according to people familiar with the matter. focusing more on wealth management. it will bring the bank closer to a previously announced goal of eliminating about 6000 jobs this year. that is your business flash update. scarlet: coming up tomorrow, a
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big one you do not want to miss. sitting down with the international monetary fund managing director christine lagarde, a wide ranging conversation. francois hollande will not be running for 2017. all of that and much more, 6:00 london time tomorrow. later today, we will hear from the mexican billionaire who has some comments about what has happened across the border the for his country. this is bloomberg. ♪
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he made the announcement saying the support opens the country to extremist movements. he becomes the first president run for not to reelection. setting three sources close to the discussion. democrats is that he has not been contacted from trump team and has no plans to travel to new york. he has been a strong advocate for coal. president obama is set to speak for counterterrorism on tuesday in florida. it is likely the president's since leaving office in january. he will also meet with special operations forces. opec's members have reached an historic agreement to reduce oil production. but

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